Attention Economy


Friday, October 25, 2024

The Economy and the Elections

‘The Economy, Stupid’? Not So Much Anymore.
https://www.nytimes.com/2024/10/25/opinion/economy-presidential-elections.html
 
How Do Electoral Votes, Presidential Approval, and Consumer Sentiment Respond to Economic Indicators?
https://www.nber.org/papers/w33068
This paper studies the effect of economic indicators on the Michigan Consumer Sentiment Index, Presidential approval ratings, and Presidential election outcomes since 1956. How closely do the indicators predict sentiment, how well does sentiment predict approval, and what role does approval have in explaining election outcomes measured by electoral votes? How much of the variance of approval ratings depends on non-economic factors like the “honeymoon effect”? Is there a role for economic indicators in explaining election outcomes once the contribution of approval ratings is taken into account? Regression equations provide answers to these questions and allow new interpretations of political history. Equation residuals and the contributions of specific variables are graphically displayed, providing insights into time intervals when sentiment was above or below the prediction of economic indicators, when approval differed from its usual relation with sentiment and the indicators, and when and why the electoral vote totals in each election since 1956 exceeded or fell short of the predictions of the econometric equations.